What does a Brighter Financial Future Look like for You?

What lights your fire financially?  Everyone’s financial future looks different.

For some people, it might be as simple as being completely debt free.  Others couldn’t live without an annual holiday.  Many want the security of a small nest egg or emergency fund being available.  Others would love an investment property.  Whatever it means to you, a brighter financial future can start with a few small changes to how you currently deal with money. The key is usually to establish some good financial habits – no matter where you are right now.

What are some steps you can personally take towards a brighter financial future?   Most often, it starts with living within your means, or spending less than you earn.  I’ll outline a few options and suggest you try a couple to begin with and see what a difference it makes in your personal circumstances.

  1. Track your daily spending habits – get a receipt for everything you purchase and pop it on a spike or in a box for a month.  See what’s really going on with your spending!
  2. Begin a budget.  And before your eyes glaze over, there’s plenty of online calculators that can help you, so you don’t need to do it alone.  Try the ASIC MoneySmart option to kick things off.
  3. Review your spending habits – Do you have the best phone plan?  Are your insurances the best value for coverage and cost?  Are your bank accounts and fees cost effective?  Do you have a low cost loan and a good deal on your mortgage?  Can you cancel some subscriptions you no longer need? There’s lots of comparison sites now available to help!  Where can you cut back?
  4. Start clearing debt – work out what’s the highest interest rate across your various debts – quite often, it’s the credit card or personal loan.  Especially if the debt if not tax-deductible, work out a plan to bring it down more quickly.  Paying the minimum each month, you’ll never get rid of what you owe!  As one clears, cancel or reduce the facility and then start directing those funds towards the next debt.
  5. Is it time to start investing?  As your debt comes down and you no longer need to fund those large payments, can these be directed towards an investment portfolio?  Find out if you’re ready to start investing here.
  6. Take care of your future!  Have you given due care or attention to your retirement savings?  It’s easy to put it on the back burner thinking it’s so far off, but it is your money and needs to be nurtured.  Chances are, the Government’s pension plan will be less and less available over time, so taking care of number one should be higher on your list than it likely already is.  And the longer you have to go, the better compounding interest will work in your favour.

Hopefully, these tips will help set you on the way to a brighter financial future.  I’d love to know if you’ve tried one out and let me know how it’s worked for you!

When should I start Investing?

I’m often told, “when I have money, then I’ll come to see you…”

I take this to mean that most people really aren’t sure about why they should see an advisor or believe that they only help people  who have funds to invest.  Not always true!

So, if you’re someone who isn’t really sure about when to start, here’s a few questions you can ask yourself to see how you’re tracking…

  1.  Do you live within your means and spend less than you earn?
  2. Are your personal loan payments up to date and credit cards paid off monthly?
  3. Do you have an emergency fund for a rainy day?
  4. Are your personal protection plans in place, covering your life, health and income?
  5. Are your superannuation funds all consolidated and invested in line with your risk profile?
  6. Are you comfortably repaying debts like a mortgage and could still manage to do so if interest raise increased?
  7. Do you have a regular savings plan now?
  8. Is there a specific goal that you’d like to achieve with an investment plan?

If you can happily respond with a Yes! to all these areas, chances are you’re ready to roll!  If not, see where you can improve your current situation before taking the leap.

Investing for many women requires a bit of soul searching.  What’s the purpose of the investment?  Is it just long term growth?  To achieve a holiday goal?  Extra savings to supplement retirement income?  To save for your children’s education?  Is paying down debt a higher priority?  Often, these reasons or needs require different time frames for the investment and different levels of risk that you’re prepared to take.

Share market and property investments are typically viewed as long term investments (five to seven years plus) and for those with a more assertive or aggressive profile.  Cash, term deposits and fixed interst styles of investment often mean a shorter term need is to be met, where preservation of capital is paramount.

An adviser can help you articulate your goals and work out your risk profile.  Chances are, you may invest very differently with your superannuation savings than you would for that trip you’d like to take next year, amd each rqeuire a very different strategy.

If you’d like to find out your Risk Profile, drop me an email and I’d be happy to forward you a questionnaire to see where your levels of tolerance sit.

What does an Adviser really do?

The term financial adviser or financial planner has been around for a long while.

When I left school though, I’d never heard of a Financial Adviser and certainly didn’t know it was a career path, or that it was the one I would take.

I knew about Life Insurance Agents or Brokers, Accountants, Economists and not much else.  So if you’re like I was, and not really sure what a planner did, allow me to enlighten you…

Advisers are Authorised Representatives of an organisation that is licensed by ASIC (the Australian Securities and Investment Commission.)  Some choose to hold their own license, some are through non-aligned companies and others are through big corporates that you may recognise such as AMP, MLC (NAB) or ANZ.

The upshot is, you need to be licensed to give advice and that’s a role we take pretty seriously.  People pay us for what we know, meaning we’re in a very trusted position and one that we don’t take for granted.

When you initially meet or research an Adviser, chances are you’ll be provided with their Financial Services Guide and Adviser Profile.  This outlines what your Adviser is allowed to provide advice on.  Some are very limited and choose to specialise in a particular niche, such as Insurance or Self-Managed Super Funds (SMSF.)  Others are educated in many areas and are called ‘generalists.’  Additional accreditation may be achieved in areas such as Aged Care and SMSFs.

Most covered areas include investments, finances, budgeting, insurance, superannuation, retirement and pre-retirement planning, estate planning, risk management, business risk mitigation and taxation.  Advisers are usually only too happy to let you know the areas that they’re qualified in and can offer advice on.

Chances are, seeing an adviser can add value to your personal financial situation, so why not consider a meeting with a planner real soon!  Most offer their initial consultation at their own time and expense, so what have you got to lose?

Traps with Default Life Cover in Super!

Many Aussies rely on their default cover in their superannuation to be ‘enough’ when things go wrong… if they give it much thought at all!

What a lot don’t realise though, is that cover can expire when an employer stops paying in to some funds, and that at age 65, cover may also cease altogether (especially if you plan to withdraw the funds at that stage!)

Another issue that many face, is that their cover is ‘unitised.’  This means that they may maintain a certain number of units of cover at a set cost per week, but these units decrease in value over time as you age, although premiums remain constant.

Premiums being deducted from super may be just what you need to have ‘some cover’ that doesn’t interfere with your cash flow too, but over time, the premiums also erode your retirement savings nest egg.

Relying solely on default insurance may leave you with nowhere near enough for your family’s needs, just when they need it most.

When thinking about how much is enough for your needs, many start with clearing debt as their main priority and this is hugely important.

Another vital area to consider is the level of income that the family will miss over the coming years.  e.g.  Put very simply, if you earn $50k per annum and have 20 years of working life left, there’s $1 million in income the family will never see (without any adjustments for inflation.)  Do you need to include this level of cover in your plans for future expenditure on school fees, retirement savings and more?  Maybe, or maybe not.

Working out ‘how much is enough?’ is vital, and chances are, you may well find there’s a gap with your default super settings.

Take the time to understand what you have, what you need and chat to a professional.  Advice is invaluable in arranging the most appropriate levels of cover for you.

Are you ready to be Unleashed?

If you’ve been following my blog for a little while, you’d know by now that I’m a bit of a fan of The Hunger Project and the work they’re doing to end hunger by 2030.

Many people are interested in the adventures I’ve had to Africa, visiting Uganda and Malawi in the past two years and have been happy to contribute to my fundraising endeavors (thank you sixty million times!!)

Yet the thought of personally fundraising $10,000 and finding $5,000 for the trip is pretty overwhelming… let alone the emotional confrontation of facing some of our planet’s biggest issues head on!

So, if you’d love to be involved, and help out, but on a much smaller scale, then Unleashed Women is totally for you!

You’ve got the next 12 months to fundraise (or personally donate) $1,000 and motivate other lovely ladies to join you on the crusade to end hunger.  Having seen first hand how ‘the other half live’ makes you so appreciative of all we have.

We turn a tap on and water magically runs out, we flick a switch and there’s electricity, we open the fridge door and could feed a small nation and still believe ‘there’s nothing to eat!’ and push the remote on the garage door to head out into the world in our vehicle that isn’t a clapped out bicycle, and that we can afford to put fuel in each week.

I signed up to be an Unleashed Woman for the end of 2016 and will be ready to go again in 2017.  I hope you’ll join me!  Can’t wait to share this next adventure with you!

Find out more about what’s involved here: THP Unleashed Women